We started our discussions on competitiveness in the banking sector. Europe needs a competitive banking sector to finance growth, innovation and strategic priorities. At yesterday's session, the Commission presented its report outlining measures to make it more efficient and better integrated. President von der Leyen doubled down on this in her State of the Union speech and the accompanying letter of intent, that the Commission will put forward a banking competitiveness and simplification package.
The Banking Competitiveness Report already outlines measures to simplify the supervisory framework itself, by reducing regulatory and prudential overlaps and reporting costs for banks, currently estimated at €11.2 billion annually.
It is important to be clear. The prudential framework put in place after the global financial crisis has made our banks more resilient. But we have seen how reforms, each individually justified, have in aggregate created overlaps and unnecessary complexity, without providing a corresponding benefit for stability.
Our objective now is not to lower the bar. We remain fully committed to the implementation of international standards. Strong common rules are essential for resilience and financial stability.
But we need to implement these standards in a way that reflects Europe's specific circumstances and avoids unnecessary competitive disadvantages. We therefore must remove the complexity and duplication that serves no useful purpose. This is an essential step towards enabling our banks to live up to their full potential to strengthen the European economy.
Next, we exchanged views on innovation in the financial sector, from payments and lending to capital markets and cross-border transactions.
The discussion recognised that new technologies, including distributed ledger technology, tokenisation and AI, are developing rapidly. And that they could bring significant gains in efficiency, access and competitiveness for consumers, firms and the wider European economy. At the same time, there was broad recognition that innovation must be accompanied by appropriate safeguards and legal certainty.
Finally, let me turn now to our exchange on AI, which was informed by an excellent presentation from Managing Director Kristalina Georgieva. AI will be one of the defining transformations of our time. It is fast becoming a foundational layer for our economy and security.
Building a genuine European innovation ecosystem, for and around AI, is therefore crucial for securing our long-term competitiveness. Today's discussion focused on getting some of the fundamentals right. But it is also clear that it is time to move from discussion to action. This means a concrete, workable and robust regulatory framework. One that creates a positive, competitive environment for EU AI companies to thrive, and for our AI ecosystem to innovate.
We also addressed the risks that must be carefully managed, ranging from securing vital supply chains to AI's implications for our labour and energy markets.
Finally, I would like to thank the Irish Presidency for your warm welcome to Dublin. I look forward to continuing our positive cooperation in the busy months ahead.
